To get loan against credit card, it is most important that how is your transaction with credit card, you use less credit and pay it on time. Banks and other financial institutions prefer to give loans against credit cards
At present, from paying electricity bills to buying flight tickets, credit cards are being used. Cashback offers and reward points are also available on shopping with credit cards. Along with all these attractive features, credit card loans also offer. But, it is important to know what are the advantages and disadvantages of credit card loan. Tax and investment expert Balwant Jain says, taking a loan with a credit card is very expensive. The interest charged against the loan on this ranges from 24 percent to 36 percent annually. Hence it becomes very expensive.
“It is an unsecured loan, sometimes the borrower defaults,” says Jain. Hence, a personal loan or a gold loan can be tried instead.
Generally, loan against credit card is pre-approved and depends on the bank. Usually banks offer EMI scheme. With this, you do not have to worry about repaying the loan. Balwant Jain says, monthly installments are the most popular in EMI scheme. If all the money is paid in one go on the purchase with credit card, then there is no charge, otherwise there is also an option of minimum payment. Jain says that the option of minimum payment gives convenience, but interest is charged on it.
To get a loan against credit card, the most important thing is that how is your transaction with the credit card, you use less credit and repay it on time. Banks and other financial institutions prefer to give loans against credit cards, but for this it is necessary to have a good credit history, apart from this how your repayment history also matters.
Sebi Registered Investment Adviser Jitendra Solanki says, every effort should be made not to take loan on credit card. Because the interest on it is very high. Apart from loan against credit card, there are many options which should be tried.
Banks remit the loan amount against the credit card to your savings account, however, if the customer does not have a savings account, the money is sent through NEFT or demand draft. It takes 7 days to send the loan amount to the account holder’s account. However, it can be sent anytime within 7 days. Whereas if it is sent through demand draft, it may take up to two weeks.
How to get loan
Banks collect certain information about the customers before giving the loan. Like, name, address, date of birth, type of credit card, when the loan request was made. However, inquiries from banks may vary from bank to bank.
